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Meanwhile, the dollar index scaled an over two-year peak, making gold more expensive for overseas buyers. Elevated US Treasury yields amid expectations that the Federal Reserve will tighten its monetary policy also hampered the non-yielding bullion.
St. Louis Fed President James Bullard on Monday repeated his case for increasing interest rates to 3.5% by the end of the year to rein in inflation, which is at its highest in 40 years.
“Hawkish comments from Fed officials are pushing up nominal and real rates in the US, weighing on gold,” UBS analyst Giovanni Staunovo said in a Reuters report.
However, “near-term high inflation and geopolitical risks are likely to still support inflows into gold products and likely keep gold trading around current levels over the coming weeks,” Staunovo added.
“In the near term, we might see some pull back in gold. It might wash all the way down to like $1,920,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago, adding gold was also pressured by real yields turning positive for the first time in two years.
(With files from Reuters)
